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1. Mr Blue is owed by Mr geeen $10,000 2 mr Blue never had a…

1. Mr Blue is owed...
1. Mr Blue is owed by Mr geeen $10,0002 mr Blue never had a company policy of an interest rate (2%a month) and rebilling fee ( $25 per month).3 Mr Red buys the accounts receivable.4 mr Red has a policy of 2% interest per month as well as a $25 per month rebilling fee.A. Mr red contacts Me green and explained he bought the ar from mr Blue (bought 10% of value of the ar.Question 1Can mr Red tell me green that his company charges a rebilling fee of $25 and a monthly interest rate of 2% a month on the unpaid last months ending balance? Obviously there never WERE these charges with mr Blue.Is this legal - to START charging what Mr Red says are his companies policy.I will have a “ slightly different” -fine tuned- follow up.I am a CPA and I understand the accounting and business policies but am uncertain of the legal right to “ start” charging someone rebilling fees and monthly rates.Thanks.As a CPA if you ever need a pro bono answer I’ll be glad to help.
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Answered in 5 minutes by:
12/2/2017
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 126,700
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Interest and rebilling fees are matters of contract, not statute, unless and until a lawsuit is filed and statutory judicial interest may begin. So, if there was never any terms for interest or rebilling between Mr. Green and Mr. Blue, Mr. Red bought the accounts under the same terms and conditions agreed upon between Mr. Blue and Mr. Green and he cannot unilaterally change them without consent of Mr. Green.

If Mr. Green is in default, Mr. Red can notify him of the default and can seek to demand payment in full and if not then he has to sue for breach of contract AND then he can ask for pre judgment interest from the date he filed the suit.

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Customer reply replied 8 months ago
If filed in court a “ retroactive interest fee from day 1 “ ( can it be set at 2% per
Month) can be added to the $10,000 original lance?I realize in NJ the 6 year statute on collecting the money.
Customer reply replied 8 months ago
I have a small tweet to the question after the last one is answered.

Thank you for your reply.

Prejudgment interest is allowed, ONLY FROM DATE OF JUDICIAL DEMAND, which would be the date the lawsuit is filed, not back to day one.

Under NJ law pre and post judgment judicial interest is .50% per annum. So without any contractually agreed upon interest rate between the parties, that is all that the NJ law allows to be added from the date suit is filed.

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Customer reply replied 8 months ago
I realize the “ after judgement” rate is a joke.Fine tuning -What if three months prior to selling an ar, Mr. Blue instituted a rebilling policy and interest rates brand new. Maybe two years after the debt was incurred.Can Mr. Blue start applying the new fees two years later? There is a non interest ., And no rebilling. For the past two years.It’s just that the company now comes up with a new policy. Is that guy “now on the hook for interest rates and we billing fees “because of a change and company policies on outstanding debts?
Customer reply replied 8 months ago
I appreciate your time. They should wrap it up and give you a five star rating after that. Thx.

Thank you for your reply.

Yes, the NJ interest rates pre and post judgment are now the same and a joke.

One party to a contract cannot unilaterally change the contract. So Mr. Blue would need to get Mr. Green to consent to the new policy, as it was not part of Mr. Blue's agreement with Mr. Green. Mr. Blue can send Mr. Green notice that he has to pay in full or he would agree to the new terms for paying in payments which would then create a new contract, because Mr. Green is given the option to pay in full or have the new policy terms apply. Since he and Mr. Blue had the contract together, Mr. Blue can offer Mr. Green a new contract essentially, either pay or the new contract will be applied (unless there is already a written contract that is in place and being complied with that is).

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Customer reply replied 8 months ago
Awesome. Do if the debtor does not pay in full he is now on the hook for the new termsI’m guessing the buyer can also do the same with the debtor.Looking for a simple yes or no and we are done.Thanks for picking up the car on the Saturday.

Thank you for your reply.

Yes, have to send it to the debtor in writing setting forth the new terms and telling him if he does not pay in full by the set date, he agrees to those terms.

Law Educator, Esq.
Category: Business Law
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Experience: All corporate law, including non-profits and charitable fraternal organizations.
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